From MEM newspaper

NC man

Well-Known Member
There’s not much room left on FedEx’s delivery vans as volume has surged during the COVID-19 pandemic.
FedEx’s average daily package volume grew in all customer segments, with U.S. small- and medium-sized customers “leading the way” with 32% year-over-year volume growth, Chief Marketing Officer Brie Carere said on the company’s quarterly earnings call Thursday.
The Memphis logistics giant is working to make the limited space it has more profitable, while also smoothing out the number of packages it delivers throughout the week. On Thursday’s earnings call, FedEx executives detailed some of the initiatives that will help the company better handle the e-commerce boom.
A larger share of FedEx’s volume has been in U.S. home deliveries as online shopping has grown in popularity during the pandemic. FedEx expects this volume “to grow significantly faster than” the more profitable business-to-business (B2B) deliveries going forward, Carere said.
“However, with retail inventories relative to sales at historic lows, we expect solid B2B volume growth this fiscal year,” she said.
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FedEx’s average daily package volume grew in all customer segments, with U.S. small- and medium-sized customers “leading the way” with 32% year-over-year volume growth, Chief Marketing Officer Brie Carere said on June 24's quarterly earnings call.


FedEx’s commercial customers, along with small- and medium-sized customers, continue to be prioritized for the company’s limited capacity, Carere said.
As for larger customers, FedEx is “confidently” renegotiating contracts with them to boost profitability, she said. Nearly half of the company’s large customer volume has been subject to pricing agreements over the past year, she added.
“This means balancing product, day of week and lane mix at the customer level while ensuring appropriate surcharges and rate increases cover rising labor costs,” Carere said.

Starting Monday, June 21, FedEx increased its peak delivery surcharges to help its network “amid ongoing capacity constraints,” Carere said. It’s the latest development in a string of added surcharges since the early days of the pandemic, with FedEx saying it’s necessary to keep its service levels high.
Many FedEx customers — especially those in the retail and health care industries — have seen explosive growth, Carere said. Meanwhile, difficulties in finding enough employees to staff its network have put a dent in company service levels.
“Yes, we want to grow our price, yes, we want to grow our yield, but we also want to have really happy, satisfied customers,” she said. “And so, we’re trying to strike that right balance.”
Packages ride conveyor belts into the FedEx Ground Olive Branch hub Wednesday, Dec. 4, 2019.


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Patrick Donnelly, a senior analyst at research company Third Bridge, said the surge in volume has stressed the networks of FedEx and other carriers to the point where they must pass on additional package volume.




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“This capacity tightness is likely to continue through 2021 and well into 2022,” he said.
FedEx is also pushing its customers to shift volume to lighter days of the week, such as delivering more on Sundays. In the fourth quarter, FedEx Ground delivered 56% more packages on Sunday compared to the year-before quarter, said FedEx President and COO Raj Subramaniam. The company now reaches 95% of the U.S. population on Sundays.
FedEx is spending heavily to allow itself to take in more package volume in the future. The company expects to “substantially increase capacity” for the next holiday shipping season by making big investments in FedEx Ground, Subramaniam said. The company is adding 16 new automated facilities and expanding more than 100 of its existing facilities, he said.
“We’re also expanding our operational solutions that maximize how and when we’re using these existing buildings, for instance, like when we run multiple preloads in an existing building,” said FedEx Ground CEO John Smith.
Matt Arnold, a FedEx analyst at Edward Jones, said in a note that investments in package sorting capabilities and fuel-efficient planes will help the company as it tries to translate rising volumes into profitable growth.
“We expect these investments to drive efficiency and better profitability over time,” he said.
Max Garland covers FedEx, logistics and health care for The Commercial Appeal. Reach him at [email protected] or 901-529-2651 and on Twitter @MaxGarlandTypes.
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Aquaman

Well-Known Member
E-commerce is exploding. We wish business to business was exploding. Ground is exploding. We’ll raise prices, but want to keep customers happy... nothing mentioned of employees lol.
 
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